Many of you avail home loans to finance your dream home. However, after your loan is processed, few of you may often switch your existing lender owing to different reasons. Home loan balance transfer option must only be availed after proper calculation and analysis by you to ensure you do not end up regretting.
Check out 4 situations where availing home loan balance transfer is considered a great decision:
- Lower home loan rate
Home loan interest rate differs from one lender to another, which often leads to the case where lenders offer a lower rate of interest than your existing home loan lender. Presently, home loan balance transfer interest rate can go as low as 7 percent p.a. based on your profile and loan amount. You must initially request for the existing lender to reduce your home loan rate. In case your existing lender refuses, you might choose a home loan balance transfer option.
However, before you opt for this option, ensure to compute your savings on this facility. Also, the fees and charges levied by the lender for this option might at times be high, lowering your savings by a huge margin. Only if you can save a substantial amount, should you opt for the transfer option.
- Need for home loan top up
Many may require additional funds for personal needs like home renovation etc. For this, you may approach your current lender to grant a top up loan. However, in case your existing lender refuses to provide the loan owing to ineligibility or other reasons, consider switching your lender by choosing a balance transfer option. Home loan refinance option allows you to avail adequate top up.
- Better terms and conditions
Often you may not be satisfied with your existing lender and might notice or witness few better or additional services with other lenders. In such a case, you can get your existing home loan amount transferred to another lender to avail those services.
- Additional product features and services
Many lenders may offer additional features on their home loan balance transfer option, like flexi loan or smart home loan. Opting for such products lowers your home loan interest burden substantially as compared to your existing home loan.
Ending note
Home loan balance transfer is an option wherein you can switch or transfer your outstanding balance to another lender. Opting for this facility results in the closure of your existing loan account and the opening of a new loan account with another lender. However, before you opt for this facility, consider the above 4 scenarios for availing of the transfer option. In case any of the scenarios is applicable in your situation, use the home loan balance transfer EMI calculator to compute your interest savings on the balance transfer option.
Also, ensure to keep the required home loan balance transfer documents handy for a hassle-free process. Crucial documents required for home loan balance transfer include an application form with a photo duly signed, PAN, Aadhaar, passport, residence proof, letter of consent, no objection certificate, foreclosure letter, property documents, home loan statement, etc.
